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Thursday, June 12, 2008

JTC Launches Hotel-In-Biz Park Tender

Source : The Business Times, June 12, 2008

A hotel within a business park? That may soon become reality, as JTC Corporation launched a concept and price tender yesterday for the development of an integrated business park facility with retail and hotel components in Changi Business Park (CBP).

The 4.7-hectare Plot 61 is a 'Business Park - White 40' site. Forty per cent of the total gross floor area of 1.26 million square feet will go towards 'white' or commercial activities.

Retail activities will take up 45 to 60 per cent of the 'white' space, while the balance will be set aside for a hotel. 'It would seem that there is a deliberate effort to ensure that a hotel will be built on the site, adding a complementary element to the predominantly business park use at CBP,' said executive director of CBRE Research, Li Hiaw Ho.

According to the tender document, bidders may opt for either a term of '30 years with an option for a further term of 30 years', or 60 years.

JTC said that it launched the tender to meet rising demand for business park space and amenities in CBP. The working population in the park could rise from 6,000 to 20,000 by 2011.

The integrated development would house firms in the high-technology, high value-added and knowledge-intensive industries. CBP is already attracting backend operations from financial institutions.

According to Knight Frank's senior manager of industrial business space Chow Kok Seng, rents in CBP can range from $3.50 to $6 psf.

He believes that the site may attract three or more bids from private developers, and Soilbuild Group Holdings could be one of them. The firm has developed Eightrium @ CBP, and recently won a JTC award to build, own and operate a stack-up factory at Tanjong Kling.

He also notes that private developers may offer bids ranging from $130 to $167 psf.

Observing that Plot 61 is larger than a previous site which was awarded to United Engineers in Q4 2007, Mr Li said that 'Plot 61 is likely to draw bigger developers which have the experience with large mix-used developments.'

The design concept probably needs to have a 'wow' factor because JTC may want the development to be a showcase, according to Chesterton International's head of research and consultancy Colin Tan. Therefore, he does not expect the award to be based solely on the bid price.

CBRE Research's Mr Li is optimistic on the integrated development's appeal. 'The proposed hotel would be able to draw guests that are working on a short-term basis in CBP or at Changi Airport, as well as participants of events held in the Singapore Expo,' he said.